stephanie link. >> buying it. >> simon baker. >> swy. >> the short-traded staples is over. >> long trade in at&t. big "t." more "fast money" at 5:00 p.m. tonight. "power lunch" starts right now. welcome to "power lunch." it is china all over the news today. it is the new cold war, they say. congress takes aim at a chinese tech company over security concerns and the slowing chinese economy also pulling down our markets. so how do you play china right now? pain at pump. gas prices in california top $5 a gallon in some places and the governor's jumping in to intervene but the question is, is that really going to do any good or is the market going to decide the price? and political roulette. the key swing state of ohio making a big bet on casino

gambling. brian schactman has more on the new jobs and new opportunities from cashing in on sin. but first, tyler is off today so bob pisani is my partner for the army. down at the nyse. >> pleasure to be here, sue. concern about china's slowdown raised by the world bank putting pressure on the market today. europe's been closed for about 1 1/2 hours right now. china now back to us after a week off. that sector to the downside as well. most of europe was weak here today. france, spain and italy all to the downside. euro a little weak. on days when the euro is weaker, the dollar stronger. typically our markets are to the downside as well. take a look at major indices here in the united states. techs are the weak link. nasdaq underperforming. notice also the transports outperforming now five days in a row. that hasn't happened in a long time. take a look at some of the big component makers, jdsu, down for a number of days. apple, third straight day down,

six-week low for apple. a congressional investigation says a chinese tech giant is a national security threat, saying that its equipment may be used for spying on americans. the explosive allegations laid out by the house intelligence committee earlier this morning on "squawk on the street." our anchor there, david faber, talked to the chairman and he's here with more on these allegations. david? >> thanks, sue. we have reported in the past, and at some length, on what is a very aggressive effort by the chinese, broadly speaking, to conduct cybere espionage. today the house committee comes out on a very large telecommunications equipment providering that seemingly come out of nowhere to be one of the dominant forces in this industry. of course an industry that we've seen change a lot. the old nortel, gone. alcatel-lucent having gotten

together. in today's report, house intelligence committee raises further questions about just exact what i what the relationship between this corporation is and the chinese government. it's been a key question. but for all of the questioning, a lot of it is conjecture. this aren't that many hard facts here, something i did ask chairman rogers about earlier today. >> we've had information from former and current huawei employees. we have both classified information. our foreign partners, australians and the british and others have passed along information they've seen whether it comes to huawei's activities which i think is a very clear indication i have no problem saying i would not use huawei equipment. i'd find other vendors. if you care about your consumer's data and the national security of the united states you need to look elsewhere. >> of course if you do believe, as i do, given my reporting on it, that the chinese are

incredibly aggressive when it comes to cyber espionage, sue, and then you believe much wlaf of what is in this report, you certainly come to the conclusion if there is a telecommunications company that's becoming somewhat dominant around the globe that has the backing of or certain connections with the chinese government, it might not be the best thing to do business with. >> so where does this go from here then, david? obviously it seems as though this story is -- has got some legs to it. what's the next action that might be taken, if any, against this company? >> well, they are recommending -- of course they are sending this report to various law enforcement agencies. they claim, at least, that huawei may be in violation of certain laws. we'll see. again there is a great deal of conjecture in today's report but you you need to sort of connect the dots to really get to the final conclusion that says, hey, these guys are really bad guys. that being said, it's a huge issue between the united states and china. not that we don't have many of them. we also talked to chairman rogers about that as well this morning. they are, as we all know, one of

the largest holders of our debt. they are one of our largest trading partners. but this is an issue that many feel need to be elevated to that same level of importance when we talk to chinese leaders. >> david, thank you so much. bob, down to you. there are several big american tech companies who are watching this showdown very closely with china. tech correspondent jon fortt in silicon valley looking at which companies stand to win and lose in all this. >> bob, the biggest, most obvious winner here is cisco because that's huawei's arch enemy in the networking space. cisco has accused them of stealing its source code and they've called out huawei as cisco's largest challenger. buyers and sellers themselves aren't an immediate win. public sector purchasing has been suffering and huawei didn't have a lot of share in the u.s. to begin with. but companies that do business with the government might back away from considering huawei.

they're the number two telecom maker in the world so this might help cisco gain some share in other markets where governments could be influenced by the u.s. move. could also help erickson, the number one telecom commitment supplier. juniper has set up demo labs to try to push the brand. the key is what happens in europe. u.s. is just 4% of huawei's business. europe is more like 14%. that's where u.s. companies will look to gain an advantage. >> jon, china is also key to another tech company in the news today, apple. the company that assembles iphones is denying reports of strikes over the weekend. what's going on with this. >> well, it's interesting. when this first china labor watch report came out saying that there had had been these strikes, i was a little bit skeptical because that organization has pushed awfully hard against apple. its tone has been a bit harsh about apple's labor relations there. they don't just stick to the facts.

but at the same time, what f foxcon comes back and said everything's fine, doesn't quite ring true even based on chinese government reports that come out there. there's somiviness there because foxcon is a taiwanese company, not always on the best terms with the chinese government but the truth probably lies somewhere in between those two is my guess. >> jon fortt, appreciate your reporting. weigh in on this for us. in today's yahoo finance poll, would you pay more for an iphone if it were made in the united states? would you? go vote. results in the next half-hour. china's trade war with japan is heating up. reports that japanese carmakers toyota, honda and nissan are cutting their china production by half. phil lebeau joins us with chicago from more on this story. >> reporter: huge implications, sue. remember, china is the world's largest auto market and the japanese automakers have been making inroads there. well, that's changed over the last couple of weeks. we've seen some rioting and some japanese dealerships in japan --

in china. we've also seen some japanese-month-old cars that have been burned on the streets of china. all of this because of protests that have flared up over a territory dispute over some islands in the east china sea. that's the broader context. basically what you have is antijapanese sentiment in china and that's behind these riots. in late september they burned show rooms. many cars of japanese automakers. the japanese automakers could lose their lead over western brands in china as they cut production. keep in mind, toyota's sales in september dropped 40%. 40%! and they were once target ing 1 million in sales. that's not happening. who's winning? korean automakers. hyundai and other korean automakers have seen their sales surge and gm is basically in a tie for number one with volkswagen in china. sales in china of general motors up 10% since august. it's sold more than 2 million

vehicles in china this year. they haven't even sold 2 million here in the united states this year. so their sales in china are critical and they are benefiting to a certain extent, sue, because of what's happening between the japanese automakers and the chinese market right now. >> phil, thank you very much. so we have slow growth, espionage worries, trade fights. so is china a friend or a foe for investors? let's ask portfolio manager share ra zechlt rvos, head of the global debt team at op hymen funds. welcome, sara. nice to have you here. weigh in on this, if you will. from an investment standpoint, is china still a good play? obviously its market's had tremendous headwinds. but in that area of the world, would you still make an investment play there or given the tensions that we've just outlined would you stay away? >> i think the tensions that you outlined are a temporary blip and we've got to get used to that in this kind of world especially with elections and slow economies everywhere until the world. the more important thing that china represents is, it has

emerged as an enxwgine of groeb growth in the aftermath of the lehman crisis and as europe has s stumbled, we want china to grow to help other countries export to china more. >> what kind of growth are you looking for? we started out at 10% to 11%. that's gradually been ratcheted down by a number of analysts. where do you stand on that growth? >> we've been targeting 7% growth this year. we hope that it doesn't fall much lower than that. we're in a key point in time where this transition of the political economy in china's taking place and it depends on what kind of stimulus measures they do at the end of this year. >> all right, sara. we'll talk to you a little bit later in the hour and get your global debt picks in the next half-hour of "power lunch." we're also keeping an eye on oil today. gas prices, much of the u.s. remaining steady. national average rising less than half a cent over the past two weeks. i'll take that. $3.83 a gallon according to the latest lundberg survey. but a very different story is emerging in california. prices are soaring to another

all-time high. governor jerry brown now taking action to ease pain at the pump. our jane wells at a gas station in northridge, california. what's he going do, jane? >> reporter: well, let's quote a gas analyst who says, gravity is at work in california. he says after this announcement by the governor, the price of special gasoline is now $1 cheaper than the peak last week -- $3.30 a gallon. not quite seeing that price translate to the pump. people jammed in costco behind me to pay $4.58 a gallon. that's nearly a dime cheaper than the state's record breaking average right now. this costco was closed on friday due to a lack of supply, but governor jerry brown has ordered refiners to start selling california's winter gasoline early to boost supplies as much as 10% after hearing cries from residents complaining that filling up now costs more than $100. listen to him! >> if california slides into a

recession, that recession will spread right across the country to the east coast and before the end of this year, the unemployment lines could be rising dramatically. >> reporter: oh, wait -- that was governor jerry brown during the last gasoline crisis -- 40 years ago when he was governor. and gasoline was rationed. deja vu all over again. back then it was the iran oil embargo. now the issue is really california's lack of refining capacity and the special blend of gasoline. "oil production in the state is down 50% from its peak in 1985." california imported a record 1 1/2 million barrels a day of crude in july. well, president obama today will just happen to be passing through bakersfield, california's oil capital. wonder if anyone will ask him about drilling some more. guys, back to you. >> i bet they will, miss jane. thank you so much. well, despite today's downdraft, a ton of companies

his hitting all-time highs inn in this market. is it too late to get in on some of those? we'll tell you of stocks in the media space you may need to look at. and how bad loans are expected to impact banks' results this time around. a look at the monday movers on "power lunch." we have a gain of better than 9 partisan, now 10% in carmax and 3%-plus in office depot. but green dot is down 20% on the day. [ male announcer ] wouldn't it be nice if there was an easier,

less expensive option than a traditional lawyer? at legalzoom you get personalized services for your family and your business that's 100% guaranteed. so go to legalzoom.com today for personalized, affordable legal protection.

breaking news right now on the race against alzheimer's disease. >> it is a big day for health care. medical experts convening at the american neurology association meeting to evaluate phase 3 alzheimer's data cooling the analysis of two separate studies on patients with mild alzheimer's disease. eli lilly's drug showed a 34% reduction in cognitive decline, the hallmark of this mind robbing disease. now earlier an analyst did say investors would be truly interested in the alzheimer's data if the combined result showed a 25% to 30% change in patient's cognitive decline over an 18-month interval. now in a first on cnbc

interview, eli lilly's executive told me why this data is important. >> this is so important, because today, there are really only symptomatic drugs available and this could be the first sign that targeting this so-called beta analoid can slow the effects of the disease. we know there is so much unmet need out there and patients are looking for a new choice. >> the rate of alzheimer's disease continues to grow. 7.7 million new cases reported each year. if this continues, 150 million people worldwide could be impacted by this mind robbing disease by 2050. we already know finding a solution or treatment for alzheimer's has not been easy. recently pfizer and j and j terminated their late stage trials. that's why all eyes have been on eli lilly since reporting top line results back in august. shares of lilly have been rallying nearly 13 where is, shares higher or not news. back to you. >> thank you, seema. very important development there. it is a down day for the

markets but walmart and auto nation are hitting new highs today. a ton of stocks from a number of sectors have hit all-time highs in this market over the past few weeks. disney, discovery communications, our parent company comcast among the names in the media world. julia boorstin is taking a closer look at these high-flying plays. >> well, bob, content remains king and people are not cutting the cord. the big question for media stocks is whether they can keep on growing. disney is at all-time highs, up 65% just in the past year. today disdisney was downgraded to average questioned whether it can maintain its pace. despite the news hacking scandal, news corp. is also on a tear on both ad and cable trends, up levels we haven't seen since 2007. discovery and scripps network interactive are also hitting highs we haven't seen since 2005 and 2008 respectively on both ads and subscriber fees. despite having to pay some of those higher fees, comcast is

trading at the highest levels since its 1972 ipo as it cashes in on a high-speed broadband. comcast satellite rival directv is also at highs as people pay up for premium bundles. so far, digital distribution has helped these companies. we'll have to see as people shift more online and also to mobile devices whether that starts to eat into media companies' margins. coming up on street signs as we look at the stocks powering the s&p 500, seema mody will look at health care and pharma stocks' healthy returns. back to you. these stocks are hitting new highs as we gear up for another important earnings season. alcoa officially kicks it off tomorrow but brace yourselves, this earning season might be a little rockier than others with big bank earnings beginning on friday. jpmorgan, wells fargo, for example. what's the state of the financials right now? cnbc's ckayla tausche taking th pulse.

>> bank earnings have been boosted for several quarters by the ability to bolster their bottom line by freeing up some of of the unused loan loss reserves. those are the funds that banks have been squirreling away to pay for loans that go sour, which not surprisingly peaked in q4, 2008, when the financial cry ss drove consumers and their debt belly-up. when credit improved, banks needed less protection and began releasing these funds, releasing them straight to their earnings. take a look at what the big banks did just in q2 which the fdic said was the lowest quarter for reserves in five years. citigroup cut 7% from its reserves in that single quarter. bank of america swiped 6.5% from its allowances. jpmorgan cutting 8% from its $25 billion in allowances. wells fargo cut roughly 3% of the $18.6 billion it keeps onhand. the problem is while bank credit

card dlen kwen elinquencies are at rapid rates, regulators are concerned about this trend. head of the office of the comp troller of the currency says much of the increase in reported prochbts is being driven by loan loss reserve releases and the issue has to be a matter of great concern especially in the face of continually high risk. for banks, the nice thing about this is we should get an answer in the next few days as to whether banks are putting the cart before the horse. we hope that credit quality is improving but this might be a rude awakening for banks. >> kayla, thanks. coming up next, we are analyzing the analysts. the street making calls today on netflix, blackrock and facebook. question is are they the right calls, and netflix is up better than 10%. we'll see. speaking of facebook, cnbc holding facebook office hours with andrew ross sorkin on the new "squawk box" facebook page tomorrow morning. as we head out, how

america's most widely held stocks are trading right now. quite a bit of red in pfizer, p and g and at&t. but cisco's bucking the trend, up .5%. bob... oh, hey alex. just picking up some, brochures, posters copies of my acceptance speech. great! it's always good to have a backup plan, in case i get hit by a meteor. wow, your hair looks great. didn't realize they did photoshop here. hey, good call on those mugs. can't let 'em see what you're drinking. you know, i'm glad we're both running a nice, clean race. no need to get nasty. here's your "honk if you had an affair with taylor" yard sign. looks good. [ male announcer ] fedex office. now save 50% on banners. j&j.

welcome back. time to analyze. you know matt. first up, facebook downgraded to sell. $16 price target at btig. here's what the firm says. we see a growing tension between the facebook user experience and

monetization. what do you think? >> this has been an ongoing question for facebook. obviously it's firmed up here recently. more of a concern for me is the fact that 1.1 billion shares are coming to market in the next six to eight weeks. i think that will put more pressure on the stock. if it breaks below $18, people may throw in the towel. >> it's at least found some kind of level it can trade around. quick programming note before we move on. don't miss richard greenfield, co-head of research at btig. he'll join street sign, 2:30 p.m. tomorrow. netflix upgraded to overweight from equal weight at morgan stanley. it's moving the stock, folks. price target, $85. morgan stanley saying, "our upgrade is based on our view that amazon.com is not a direct threat to netflix u.s. business." shares of netflix surged in one week 30%. $55 four days ago. now 25% move in four days?

>> analysts obviously can influence a stock. we saw this stock at $120 earlier in the year. back at $55. it was cut in half. good rally here. it has to break through $85 for me to get aggressive on the buy side. i think there is room to $80. so short term it is a buy but above $85 we may see short cover and all the way through $100. blackrock upgraded to buy from neutral at citi, citing valuation saying it might be large but it's gotten cheap again. firm raising its price target on blackrock $220, shares up about 27% over one year. your thoughts. >> best of read here. blackrock, they're a major player in the etf market which has obviously been a huge boon to equities as we go forward here. the stock hasn't performed much this year, up 5%. s&p up 16%. not a bad value end of the year type play. i can see this thing going to their price target. that's probably a good call. >> thanks very much for your thoughts. gold prices getting ready to close. we'll head live to the nymex for the final trades coming up next.

plus, imagine this -- no minimum balance, no monthly, annual or overdraft fees. nothing! walmart and american express are offering consumers exactly that. this raises the question -- why do we need banks to put our money in anyway? smart comes with 8 airbags,u3 a crash management system and the world's only tridion safety cell which can withstand over three and a half tons. small in size. big on safety.

heartburn symptoms causedelieve by acid reflux disease.f tons. osteoporosis-related bone fractures and low magnesium levels have been seen with nexium. possible side effects include headache, diarrhea, and abdominal pain. other serious stomach conditions may still exist. talk to your doctor about nexium. with the blackish-blue frame and the white dots and the splattered paint pattern, your lights are on. what? [ male announcer ] the endlessly customizable 2013 smart.

welcome back to "power lunch." i'm shaurn ron epperson here on floor of the mercantile exchange on this columbus day. gold closing around $1,775 an ounce. it is down only about $5 or sold. only about a $14 range the whole session. firmness in the dollar putting pressure on some of the metals. in the metals complex as well we are looking at that chinese data coming out from the world bank. growth forecast there seeing less growth than originally forecast. that has weighed on the base metals. and in terms of etfs, look how they've shined in the longer term for the third quarter. etf security saying they've added $23 billion to a new record $151 billion in terms of assets under management there in gold etfs. back to you, bob. >> sharon, thanks very much. let's get trading action

down here. matt joins me again on the new york stock exchange floor. 2-1 declining to advancing stocks. volume a bit on the light side. bond markets closed today. what are we going to expect this week? >> we really have nothing to go on today. we were hoping a little something on europe, maybe greece. u.s. has shrugged off what we've seen out of the far east with the world bank cutting them. we're going to focus on earnings. alcoa kicks it off but that stock's been range bound 9 to 10. we'll look at consumer staples, costco, maybe jpmorgjpmorgan. >> some people are expecting us to do a lot better in the fourth quarter. are thee in an earnings trough of some kind in is this the bottom or are we going to start seeing improvement? >> i'm probably more negative than most. some of the bellwethers, fedex, caterpillar.

that's affected their stocks. it hasn't taken too much out of them in the bigger picture. if they can come out and beat this market could really go higher toward the end of the year. >> i think there's already a lot of negative sentiment priced into the market here. to the nasdaq now where bertha coombs is following the big movers. >> some of the big movers do not have enough market cap heft to really move the nasdaq higher. netflix up 10.5% on that upgrade from norman stamorgan stanley. amazon modestly positive today. interestingly today the big downward drawdown is coming from google and apple, responsible for about 40% of the negativity. apple reportedly set to launch that ipad mini next week. the tok in the meantime is technically very weak. this chart is down 4 of the last six days since we started here in october, down 4% for the month. below its 50-day moving average.

technicians at gray wolf say don't buy this until it gets back to $621, $622. it will have resistance to get back above $650, but longer term they say that's going to be good. winners today -- poly ccom and cisco. they seem to be getting the antihuawei bounce today. . >> mary thompson with a market flash. we have a number of companies hitting 52-week highs. among them walmart, aig and 3m, loss clorox which is the second-worst performing stock within the s&p consumer sector group. up just about 1%, 74 cents. that's a 52-week high for clorox at $74.48. with the world recovery potentially on the ropes, where do investors turn in these volatile times? our next guest has some truly surprising suggestions. back with us now, sara zervos who manages $22 billion across three international and emerging

market debt funds for oppenheimer funds. welcome back, sara. i know you do have some surprising suggestions for our viewers. you like emerging market debt, but perhaps not some of the usual suspects. >> sure. so we look across several different asset classes in emerging markets and one of the asset classes we like is coverage high-yield debt which brings the name venezuela to mind. that usually makes a lot of americans, investors, generally a little wiggly. >> i would say that's a good observation. but what is it that you find compel enough to go that far out on the risk curve? >> well, it is not that far in terms of when we do the fundamental analysis, we say what's venezuela he's ability and willing mess to pay? it is actually quite high. i disagree personally with chavez's economic policies and his political stance, but for a bond holder, they've never defaulted and they have a lot of oil and a lot of cash. >> sara, bob pisani. you say you like emerging market corporate bonds as well. can you talk about the correlation there? what are people getting in to

when they buy emerging market corporates? how do they act relative to u.s. corporate bonds, for example? >> well, in the emerging market corporate space we have investment grade bonds and high-yield bonds. our high-yield bonds tend to correlate with u.s. high-yield market but investment grade bonds are truly a high-class asset class. so when you go abroad you actually diversify into different economies, different sectors and high-quality global companies that we think are amazing. >> do you recommend a significant portion of people's assets be put into these emerging market funds? for example, should i put 5% in to emerging market bonds of -- i mean that's a significant allocation. where are you here? >> well, in the grand scheme of things, emerging markets are still risky and fundamentals, they're much lower risk than a lot of developed markets. but the liquidity is lower. in that sense you have to be a more medium-term investor and definitely more than you own now because not many people are aware of the opportunities in the debt space. >> you also, going back to the high-yield corporates on an

international front, you like russia and brazil. brazil, i understand certainly. russia, i would be a little nervous about, considering the crackdown that vladimir putin has put in place against some individuals certainly but it has the corporate sector there a little bit worried as well. are you at all nervous about that? >> i'm personally more nervous about the equity market side of things in russia than the fixed income side. in particular, we've got some of the largest oil companies, steel companies, very large telecom companies, all with incredible balance sheets and they get a risk premium associated with them. basically they pay you more than a similar quality company in a different country. so we actually find the risk/reward is terrific there. >> you also like emerging market currency bonds on the long side of things. which ones in particular? >> so we're looking at more of the high-yielding markets such as brazil, south africa, turkey and mexico which offer several hundred basis points, near 500 basis points more than you get in a 10-year bond in the united

states, for example. >> some good advice. thank you, sara. nice to see you again. sara zervos with oppenheimer funds. let's recap some of the big headlines driving today's session. united health group buying about 90% of a brazilian health benefits and care provide are fore4.9 billion. shares of the u.s. largest health care insurer right now just a bit to the up side. 0.75%. gm is down. they say they'll create 1,500 jobs at a new software development center in michigan. shares of the automaker down slightly. finally, significant delays for passengers flying alaska airlines. a computer problem leaving the airline unable vo collection in passengers starting this morning around 7:40 a.m. shares of their parent company you see to the up side 1.33%. we know about vanity license plates, but vanity cell phone numbers? what would your number be? we'll talk about that coming up. plus, a growing number of debt stricken state governments turning to sin for salvation.

our brian schactman is in columbus, ohio with some details on that. hi, brian. >> reporter: hey, sue. you know, people sell cars and say it can go from 0 to 60 in four seconds? well, ohio's gone from 0 casinos to 3 in less than a year. that's really fast. next on "power lunch" -- is it really good? we'll be right back. ♪ [ male announcer ] how do you make 70,000 trades a second... ♪ reach one customer at a time? ♪ or help doctors turn billions of bytes of shared information... ♪ into a fifth anniversary of remission? ♪ whatever your business challenge,

dell has the technology and services to help you solve it. make sure the news keeps coming with thinkorswim by td ameritrade. use the news links breaking stories with possible breakout stocks, options with potential opportunity, futures and forex with in-depth analysis. it's an all-you-can-eat buffet for all things trading. thinkorswim by td ameritrade. it doesn't just deliver news. it's making news. trade commission free for 60 days, plus get up to $600 when you open an account.

welcome back. today's yahoo! finance poll, we asked would you pay fmore for a iphone if it were made in the united states. 33% said yes. 19% said no. i don't care where it's made. 48% i would prefer if it were made in the u.s. but wouldn't pay any more for it. >> that is a great poll and says so much, bob. thank you. why do oil prices rise so fast and fall so slow? we are going to try to get to the anger of that age-old debate. we're going to go to the front lines, talk to people about

this. also, the u.s. coming out swinging against two big chinese companies. we've got the one american company that stands to benefit but will it cause china to retaliate? and you talked about it a few minutes ago, a top analyst making a big call on facebook. he is with us live on street signs. now back to sue and bob on "power lunch." >> thanks. now to the economy and a major shift that's taking place. state and local governments are struggling to cover budget shortfalls. they're increasingly looking to gambling as a way to raise revenues. is it working? is it worth it? brian schactman live on the ground in columbus, ohio and the third casino opening this year. what's the verdict, brian? >> reporter: well, so far, it's been very good, bob. it's funny, i talk about how quickly it's grown. it will be four casinos next spring. reason why is easy -- jobs and its taxes. but when you saw these doors open earlier today, thousands of people streamed in within minutes. obviously there is a lot of

demand of what's going on here. they're here for one thing and one thing only -- that's to gamble. one-third of all the money made to penn national gaming goes back to the state and city in taxes. the city of columbus expects to get at least $15 million directly next year and that will go a long way. of course, interestingly when you spoke to t i spoke to the city's mayor today, he was just as focused on job creation. the city needed 3,500 workers to build it and 2,000 employees . >> the more jobs you have in a community, the more income there is to the city. >> ohio's considered a swing state. right? but unemployment here has been running well below the national average. we look at a few dealers doing their thing here. been below the national average for a while. looks like today a lot of people played hookie. at least 5,000 people have been here. there are a few notes of

caution. number one, the two casinos that were open in 2011 already reported year over year decreases in revenue, only open a few months. i also want to point out projections from income taxes from here are already well below what they initially thought when they green lighted these projects. >> brian, where exactly did they build that casino in columbus? >> reporter: well, they wanted it downtown. the city said, no, our downtown is doing well. we want to put it right on the edge of town. this used to be an auto parts manufacturing facility and it had been abandoned for years. so they came in and there wasn't much built up and the state and the city put in extra money to build up around it. the hope is that it will be an economic boon to the surrounding area as well as what goes on inside this building. >> looks like the whole town is there, brian. thanks very much. appreciate it. a terrific read over the weekend in the "new york times" magazine about ina drew and how

the steps leading up to the bank's giants $6 billion trading loss and fall of the most powerful woman on wall street. here now is "times" staff writer susan dominus. thanks for joining us. it is a very good read. but it leaves me with questions at the same time, probably you as well. this is a very accomplished woman. she was an incredibly artful trader. did well in guiding the bank through the 2008 financial crisis. jpmorgan chase didn't end up needing t.a.r.p. they took it at the government's behest. so what was it about this particular situation that did not allow her to execute the way that she had in the past? >> i think that she would probably say that she had a lot of faith in the traders who were working below her, and she would probably say the same thing that jamie dimon said about her, which was that he had total faith in her and she had total faith in the people operating under her, and as jamie said,

you trust but verify and there wasn't enough verifying going on, unfortunately. >> she was well liked by most of her colleagues, if not all of her colleagues. you quote a number of them in the article. singing her praises. yet there was one particular meeting in new york between the london office and the new york office, and that certainly was not the type of atmosphere that she found herself in. as a matter of fact, it was quite acrimonious. >> i think that everyone would agree ina could be very, very tough when she needed to be but i do think the relationship between her and the senior trader in europe did mystify a lot of the people who had worked with her for years because it was so unusual and that he seemed to disrespectful openly to her. >> do you think from your research and reporting that she was at hands-on in this particular situation having to deal with the london whale as she was in previous situations or not and was that part of the perfect storm that really brought her down? >> i think probably she would

not ever say that she was an expert in structured finance and these kinds of very complicated trades that were being executed there. she was certainly involved in hiring achilles and had a feeling for the kinds of things that the traders underneath him were doing probably was a little bit more hands-off in this particular situation than most. >> what do you think lies ahead for her? i know that she hasn't talked to anyone. you talked to her friends, to her colleagues, many of whom requested anonymity. but what do you think is next for ina drew? >> i mean some of her friends said they could imagine her showing up at a hedge fund or maybe she'll drive to silicon valley. who knows? it is hard to say. i think she needed a real period of loafer and some time to sort of reflect on what happened and find her way going forward but i wouldn't be surprised if we heard from ina drew again. >> i was curious when she tendered her letter of resignation and jamie dimon was before the press and he was talking about her. he took pains to remind people of her accomplishments.

he certainly didn't seem to blame her in the way that many people thought perhaps he would. >> i think he's been very clear that this happened on her watch, and so she's there for the appropriate person to take the fall. but i also think that he felt like it was a huge mistake. someone had to be held accountable. but that she had 30 years of a really, really strong track record, and that one very big picture mistake doesn't necessarily erase all of that accomplishment. >> we were talking about it in the office. i just wonder whether it wasn't -- i find it ironic that she could guide the bank so aptly through the 2008 financial crisis which decimated firms on wall street and jpmorgan certainly came out healthier than most, if not all. yet, was it -- it seems as though she was faced with the perfect storm. she had the london office putting on larger trades than she probably would have been comfortable with had they given her all the information, which i think is a key point. she did not exactly get all of the information. and at the same time, the market turned against her an at the

same time the position was too big. >> yes. i think that's absolutely right. it was -- and also i think -- as i said in the piece, i think it was just this rare instance where they just -- somebody said to me that she had never had a position leaked before. she never had all the hedge funds going up against them in quite that way. it was sort of, for her -- it had happened in smaller ways but just the significance of it, the regulatory environment, all of those things came together in a way that maybe she just couldn't foresee. >> susan, thanks for joining us. it is a good read. enjoyed it very much. >> appreciate you having me here. >> great interview there, sue. sprint customers can now pick their own vanity phone number. i'm not kidding. the idea is simple. instead of a ten-digit number you just dial "power lunch" instead. call me. don't go away. ♪ [ piano ]

you. we know you. we know you're not always on top of it. and how could you be? that often you just want... quiet. we know all that life demands from you. and how it's almost impossible for you to escape. almost. introducing a car made better for you in every way. the luxurious, all-new honda accord. it starts with you.

time for the power rundown. kayla tausche and bob pisani is with me as well. china, those tensions we mention seem to be deepening. nation, now friend or foe to the u.s. and its investors? what do you think, kayla? >> i learned last week that china apparently funds pbs so i'm inclined to say friend if

that's the case. but i think where investing is concerned, if you don't know the risks, buy american. all throughout the summer, through the european debt crisis we were saying only invest in companies that have the bulk of their revenue here in the u.s. i think if you don't understand the risks -- and if you don't want david faber's documentaries, stick here at home. >> bob? >> slightly different. i pride myself in not being alarmist but i am a little concerned about this. we know the chinese government is very involved in corporate espionage. at least has a history of that two, we aren't dealing with a company that's selling plastic toys here. if that was it, i woebts be so concerned. telecom equipment, i think i am. given the whole history here, given the fact that the chinese government, i think it is reasonable to assume they can coerce people or demand information from companies if not get outright cooperation. think there is grounds to be a little concerned. >> move on to the next topic. google moves into the credit business. am done offering loans to online sellers and american express enlists walmart to bolster its prepaid card business.

it is called bluebird. at this rate we posed the question do we even need banks. kayla, i think it might be a very positive development for a lot of consumers. >> for individuals and for consumers, i think yes, you don't really need the banks. but for corporations i think you definitely do. think about situations that we've had in the lending universe. a $20 billion loan to fund the at&t/t-mobile merger of a couple years ago? that didn't happen, of course, but would amazon be able to lend to that? companies like groupon have a loan. they went public. they had to have banks that did that. they compete with groupon and amazon's living social so you'd worry about sharing some of that information. i think for corporations we need the banks. >> this is part of a new emergent shadow banking system. remember the old shadow banking systems like lehman, the other banks that are out there, hedge funds, money market funds? i don't have any problem with this, however i want to make hur it is transparent. if google's got $100 million lent out, i want to make sure we

can see it and it is not in some offshore vehicle somewhere. >> this was fun. finally, sprint customers can now choose their own vanity phone numbers for a $3 a month extra charge. so ladies first, kayla. what's your vanity number? >> well, the one that i chose of course, they have to begin with star star. i chose eatspbrk. >> why can't people remember my number? why do i have to pay $3 a month for it? >> bob, in your defense your producer came up with that. at least that's what she thinks of you. maybe that is not public perception. >> good point, kayla. why should we do it? because sprint wants ow spend $3 more a month. >> that i understand. >> you can't get away with not giving away yours, sue. >> i came up with star star mom! because that's all i heard all

weekend was "mom!" but our producer changed it to anchormom. so we'll see. >> that's better. >> you think that's better? thanks, guys. coming up in the next hour, you may have seen the story on "60 minutes" last night. we have a stop check on the italian company that basically controls the eyewear business. that's in the next hour right here on cnbc.

so anyway, i've been to a lot of places. you know, i've helped a lot of people save a lot of money. but today...( sfx: loud noise of large metal object hitting the ground) things have been a little strange. (sfx: sound of piano smashing) roadrunner: meep meep. meep meep? (sfx: loud thud sound) what a strange place. geico®. fifteen minutes could save you fifteen percent or more on car insurance.

why they have a raise your rate cd. tonight our guest, thomas sargent. nobel laureate in economics, and one of the most cited economists in the world. professor sargent, can you tell me what cd rates will be in two years? no. if he can't, no one can. that's why ally has a raise your rate cd. ally bank. your money needs an ally.

let's get you caught up on wall street right now. keep in mind on friday we closed near basically the best levels that we've seen in some time, of course. as a result of that, perhaps profit taking is not a surprise. we're down about 29 points on the dow jones industrial average. nasdaq down 24, down better than .66%. s&p 500 holding the 1,34450 lev so far anyway. >> earnings season kicking off tomorrow. you know alcoa will be the first one. what are you watching for the days and weeks ahead? >> probably looking more at the retail sector -- costco,

safeway, yum brands. i think we're going to find out if they're able to pass along the recent food price increases to the consumer. yum! >> i think the important thing is are you turning defensive? some people are, some are arguing u.s. based stocks should be the way to go in terms of investments and avoid companies that have a bigger exposure to global markets like materials. >> i definitely would be in the defensive camp as far as u.s. based. we have seen exports held the rally. seems like u.s. equities are the place for long term. >> overall, matt, do you like the market or since we touched five-year highs last week it is maybe time for a pullback? >> i would expect a pullback. maybe we could get a re-entry point than a little bit and chasing the market.